A holiday-shortened trading week will still offer plenty of economic reports that may continue to stoke the fears that recovery may be a distant mirage. Among the offerings, consumer confidence may have served as a barometer of faith for American consumers. Coming in at a disappointing 49.3 – lower than May’s 54.8 – the index was well short of the forecast for an unchanged level of 55. Consumers are apparently losing faith in the notion that recovery is underway. Business and employment concerns were likely at the top of the list of worries.
Foreclosures will likely continue to be a fly in the ointment as the housing industry struggles to climb out from the depths of the crisis. The number of foreclosures in process grew by 22 percent in the first quarter. Most recently, mortgage applications hit a seven-month low with the fall in demand for refinancing. Mortgage payment delinquencies are rising, with recent data from Fannie Mae showing a 27 basis point increase in April – and that was only for single family homes. Multifamily serious delinquencies are four times what they were one year ago.
The continuing theme to economic news stories is hope on the horizon; however, things may not be that simple. Consumers who are behind on mortgage payments may very well end up behind on credit card payments, creating a downward spiral. This may very well have been a contributing factor to the lower confidence number. Manufacturing activity has increased, exceeding economists’ estimates. At 44.8 for the month of June, it is still below 50 – the level considered to be an indication of growth. How much of this activity growth is sustainable remains to be seen.
The last (but certainly not least) important economic report this week will be the non-farm payrolls number, due out tomorrow. A Briefing.com survey suggests this number will come in as 363,000 jobs lost in June, and the unemployment rate will rise to 9.6 percent. Ahead of the actual release, Automatic Data Processing has said that the private sector dropped 473,000 jobs in June, an improvement over May. This was much higher than the anticipated 394,000 job cuts. While there may fragments of hope that things are improving, the employment situation appears to be weak. The focus continues to be finding the best of the worst in the current situation.
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Past Performance is Not Indicative of Future Results.
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